The Sales & Use Tax Simplification Task Force met again at the state capitol on July 26th to continue discussions on simplifying sales and use tax in Colorado. I’ve been a member of the task force since its inception in 2016 .

Funding a centralized system

The task force has been pursuing next steps for implementing a centralized electronic sales tax systems. This system would enable taxpayers to collect and remit sales and use tax to one location and provide a single location for licensing and registering a business.

Funding this simplified system is a hurdle. Legislative staff presented a number of options at the meeting. Among them:

  • Addition of an administrative fee
  • Tap State General Fund dollars
  • Increase the state’s sales tax rate by 0.1%
  • Increase sales tax licensing fee
  • Collect Streamlined Sales Tax voluntary compliance revenue

The task force is next charged with narrowing these funding options to what might pass muster.

Issues and updates 

Additional issues and updates discussed at the task force include:

  • A uniform sales and use tax return form that would simplify how businesses file taxes for state and local jurisdictions 
  • 39 cities have adopted the Colorado Municipal League standardized definitions for taxable goods and services, and more cities are coming online
  • Wayfair implications on how the state, local and 70+ home rule city jurisdictions will tax items purchased online

The takeaway

Talk is now leading to action as the task force takes these necessary next steps to simplifying the sales and use tax system in Colorado. It’s a process and it’s taking time but the end goal is worthy. I’ll keep you posted as the task force makes headway.